The concept of “liability for breach of obligations” means compensation for losses resulting from default on obligations arising from an agreement signed by two parties to a transaction. Anyone who has violated the conditions and has not fulfilled obligations under the contract is obliged to compensate the losses incurred by the injured party. The main condition is compensation for direct losses. Indirect losses are not reimbursed.
Violations must be proven in order for liability to breach obligations to arise. These facts may include:
- Retention of other people's funds.
- Non-refund of money and other funds and evasion of return.
- Delay in the payment of debts.
- If the creditor’s funds are not returned.
- Fulfillment of obligations under a contract of the wrong quality or not fulfilled obligations at all.
Indemnification
What is meant by loss? Loss of certain benefits or direct losses due to unfulfilled contract terms.
The injured party is the one who spent money and as a result received expenses, or his rights were violated with subsequent losses, as a result of which there was real damage or lost the opportunity to receive income. The calculation of losses often depends on the prices at which they are considered: on the day of occurrence or on the day the victim goes to court.
Losses are fully compensated - this principle in disputes may be limited. In accordance with the law, liability for breach of contractual obligations may be limited. For example, lost profits under an electricity supply contract are not reimbursed. Only if it is provided for by the contract, lost profits can be reimbursed.
The penalty and compensation for losses incurred are measures of liability, but if the penalty has been paid, it shall be taken into account in the final determination of losses. Responsibility for breach of obligations may include only one punishment. There are other types of forfeit that can be recovered:
- exceptional;
- penal;
- alternative.
If the debtor did not begin to fulfill the terms of the contract and did not take any action, then in kind, he should not return anything. Failure to comply with the terms of the contract does not remove liability from the guilty party when the damage occurs due to negligence or intent.
If someone instead of another receives money and uses it, he must also compensate for the losses incurred, together with bank interest. Interest on the use of funds will be credited to the total amount of damages.
Evidence of no fault lies with the party that is accused of non-performance of the contract. If it is proved that all measures have been taken, prudence and caution were present in all actions, then the person may be found not guilty.
Responsibility of entrepreneurs for failure to fulfill the contract
For entrepreneurs, the law establishes a stricter liability for breach of obligations. All violations in the performance of contracts are subject to unconditional compensation. The only evidence of a lack of guilt that can be taken into account is force majeure circumstances . Such circumstances cannot be considered the absence of necessary goods or a sufficient amount of money. The parties to the dispute cannot legally agree to eliminate or limit liability for breach of obligations. In other words, if the trial has begun, no peace will come to an agreement.
The parties may agree on what prices will be accepted in order to recover losses. The court may independently determine the procedure for determining losses; the rules may also apply in accordance with other laws or acts. In addition, bank interest may be recovered for the use of money in the event that their return was not made on time or was deliberately withheld by the guilty party.